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May 17 — On the first day they could do so, 17 issuers filed documents with the Securities
and Exchange Commission seeking to raise money to fund small enterprises ranging from
a grocery delivery service to a start-up that will develop plants that can help light
a room.

The fundraising is permitted under new SEC crowdfunding rules that became effective
May 16, allowing small companies to raise up to $1 million in a 12-month period without
costly and time-consuming Securities Act registration.

Many of the issuers filing a Form C May 16 were small, with target offering amounts
ranging from
$20,000 to $50,000. Most issuers did accept oversubscription offers in the event they
reached their offering target amounts. Investors wishing to participate in this new
means of raising capital have a wide range of business ventures from which to choose.

In addition to Nextdoororganics Inc.'s grocery delivery service with produce from
small batch producers and farmers, and TAXA Biotechnologies Inc.'s proposal to engineer
plants that glow for home or commercial lighting purposes, fund-raising forms were
filed by:

MobileSpike Inc., which offers a product that allows law enforcement officers to remotely
disable a vehicle engaged in a dangerous high-speed police chase;

Gigmor Inc. , which is promoting a digital music booking platform to bring live
music venues and artists together;

NextRX Inc., which provides a digital registration and scanning check-in system for
subscribing medical marijuana dispensaries; and

Rocketbooks, which created reusable paper notebooks that scan and organize handwritten
information in the cloud, and that can then be re-used after a turn in a microwave,
which makes the ink clear and the pages ready for more writing.

Restrictions on Offerings

The rules impose limits on individual investments based on the investor's income or
net worth, and regardless of financial status, as the aggregate amount of securities
sold to any investor through all crowdfunding offerings in a 12-month period may not
exceed $100,000. Securities purchased in a crowdfunding transaction generally may
not be resold for one year. The rules were required under Title III of the Jumpstart
Our Business Startups (JOBS)
Act.

Issuers relying on the crowdfunding exemption must file certain information with the
SEC on a new Form C and provide this information to investors and the intermediary
facilitating the offering. Issuers relying on the crowdfunding exemption must also
file an annual report with the SEC on Form C and provide it to investors.

All transactions relying on the crowdfunding rules must take place through an online
SEC-registered intermediary, either a broker-dealer or a new entity defined by the
rules, a funding portal. A funding portal must register with the SEC on a new Form
Funding Portal, which includes information such as the funding portal's business activities,
legal status and disciplinary history. The funding portal must also become a member
of a national securities association (currently, FINRA).

FINRA rules establish the application procedures, conduct and compliance requirements
as well as investigative and disciplinary provisions applicable to funding portals.
A company relying on the rules is required to conduct its offering exclusively through
one online intermediary platform at a time.

To contact the editor responsible for this story: Susan Jenkins at sjenkins@bna.com

For More Information

Comparison surveys showing the regulatory
differences between the crowdfunding exemption and so-called Regulation A+, as
well as other forms of unregistered offerings, are available on Bloomberg Law:
Corporate Transactions. For more information on Bloomberg Law: Corporate Transactions, please
visit http://www.bna.com/bloomberg-law-corporate-transactions/

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